Film piracy heads north of border

VAN NUYS - When Hollywood execs get together to bemoan the roughly $20 billion a year they lose through international movie piracy, they tend to round up the usual suspects: countries like China, Russia and India.

But a hearing Monday sponsored by Rep. Howard Berman, D-Van Nuys, flushed out a new villain in the costly international piracy trade: Canada.

In fact, the two-hour-plus hearing flowed on a decidedly Blame Canada undercurrent.

"We expect China to act like a potential enemy and adversary of the United States," said Rep. Dana Rohrabacher, R-Huntington Beach. "We don't expect that from Canada. It's so disturbing to know that Canada's becoming the transshipment depot for counterfeited goods from China."

Berman, chairman of the House Foreign Affairs Committee, Rohrabacher and a handful of other representatives sat down with an impressively glittery set of witnesses - including Oscar-winning director Steven Soderbergh ("Traffic"), Walt Disney Studios Chairman Richard Cook and Zach Horowitz, president and chief operating officer of Universal Music Group - to hear dire warnings, possible remedies and a few well-timed quips.

Berman mentioned last week's Internet leak of an unfinished copy of 20th Century Fox's upcoming superhero spectacular "Wolverine" as a timely example of how grave the situation is.

"... What can we do?" Rohrabacher asked at the hearings held at the Van Nuys Civic Center. "What's the retaliation that we can seek?"

But Berman got even bigger laughs with: "The military option is off the table."

Joking aside, lawmakers said countries must make an effort to bring their copyright laws in line with world standards.

"We still need Canada to take a meaningful step to updating its copyright laws to come into compliance with the World Intellectual Property Organization Internet Treaty," Berman said in his opening remarks.

Financially penalizing producers of films made in countries that take part in digital piracy was suggested as a way to bring their governments in line.

"The only thing that's going to have any teeth is ... when their content comes this way, it's harder for them to make the kind of profits on their material that they're allowed to make now," Soderbergh said.

The problem is far from limited to China and Canada. Disney's Cook noted how his company's Oscar-winning, animated Pixar release "Wall-E" remained unpirated for a week following its release last summer in the U.S., where prohibitions against in-theater camcording are strictly enforced. But a week later, two days after it premiered in Kiev, Ukraine, "Wall-E" popped up on a Russian Internet site.

"Within 10 days of the film's Ukrainian theatrical release there were copies online in five different languages (including Russian, English, Spanish, Dutch and Mandarin)," Cook said.

Huge hits such as "Wall-E" still manage to make a tidy profit despite whatever revenues they lose to illegal DVDs and downloads. But Soderbergh told the Daily News a harrowing story about his last feature, the two-part "Che." The biopic of iconic Argentine revolutionary Ernesto Che Guevara was never expected to do more than modest business in American arthouses, but thanks to piracy it was decimated commercially in its real money market.

"The movie opened in Spain last September, four months before it opened anywhere else in the world," Soderbergh says. "Spain is a known hotbed of piracy. And that killed us in Latin America; I mean, it killed the movie. All of our distributors from Latin America called us and said, `We're dead.' Clearly, everybody had bought this thing on the street; it was shocking how low the attendance numbers were."

The hearings, which were designed to take testimony and not consider policy, produced a general consensus that until all nations respect intellectual property rights, pirates will always find safe harbors from which to rip off artists, producers and the wide range of people their productions employ.

Monday's hearing was scheduled ahead of the April 30 release of the Office of the U.S. Trade Representative's annual report on intellectual property policies and practices in other countries.

Once the report comes out, Berman promised to hold follow-up hearings in Washington.